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U.K. and E.U. fail to reach Brexit deal

Photo: Virginia Mayo / AP

The European Union and the United Kingdom failed to reach a Brexit deal today after a round of negotiations in Brussels. However, E.U. Commission President Jean-Claude Juncker and Prime Minister Theresa May both expressed optimism during a joint press appearance that a deal could be reached as talks continue later this week.

The impasse: Most of the buzz surrounding today's negotiations centered on the Northern Ireland/Ireland border, with concerns that a potential deal might involve Northern Ireland, which is part of the U.K., remaining within the E.U.'s single market and customs union. That led to backlash from both May's allies in government, Northern Ireland's Democratic Unionist Party, who vehemently oppose such a deal, and leaders in remain-heavy Scotland and London, who would want such a deal for themselves.

A huge clue about Mueller's endgame

Axios has learned that special counsel Robert Mueller has focused on events since the election — not during the campaign — in his conversations with President Trump's lawyers.The top two topics that Mueller has expressed interest in so far: the firings of FBI director James Comey and national security adviser Michael Flynn.

Why it matters: That suggests a focus on obstruction of justice while in office, rather than collusion with Russia during the campaign. But both sagas are interwoven with Russia: Trump himself has linked Comey's firing to Russia, and Flynn pleaded guilty to lying to the FBI about conversations with the Russian ambassador during the transition.

The Mueller and Trump teams are hoping to work out the specifics of a presidential interview within the next few weeks.

The big question they're debating is whether it'll be in person, in writing, or some combination of the two.

After a weekend of increasingly personal and vocal battles with Mueller, the White House extended an awkward olive branch on Sunday night, with White House lawyer Ty Cobb issuing this statement:

“In response to media speculation and related questions being posed to the Administration, the White House yet again confirms that the President is not considering or discussing the firing of the Special Counsel, Robert Mueller.”

But that's too late. Veering from the White House legal strategy of cooperating with Mueller, Trump attacked him by name on Twitter, seeking to discredit the eventual findings with Republican supporters.

Someone familiar with the process said that was presidential frustration, and that the Trump team continues its ongoing dialogue with Mueller.

Money for McCabe: Sources expect that former FBI deputy director Andrew McCabe — fired on Friday night, just 26 hours short of eligibility for his full pension — will collect at least some of it, although how much remains murky.

The Justice Department tells us the pension won't be zero, but it will be less than it would have been if the administration had allowed him to retire on Sunday. And it could be delayed by years.

McCabe has gotten conflicting reads from the government about the firing's effect on his pension.

P.S. CNN's Brian Stelterpoints out an apparent effect of Trump's weekend fulminations: James Comey's book, "A Higher Loyalty," out April 17, went from #15 on Amazon's best sellers on Saturday morning, to #1 (where it remains) by Sunday.

"The spike in sales is somewhat reminiscent of the interest in 'Fire and Fury,' Michael Wolff's controversial book."

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The swamp’s tug-o-war over America’s ethanol mandate

Illustration: Rebecca Zisser / Axios

A biofuels standard Congress passed more than a decade ago in the name of rural development, energy security and climate change has devolved into an arcane fight over market share that has nothing to do with those initial three goals.

Why it matters: The law — called the renewable fuel standard that requires refineries to blend biofuels into gasoline — is a textbook example of how regulations create winners, losers and unintended consequences.

The level of attention President Trump has given to this policy is remarkable given the chaos emanating from him in the West Wing. It reflects the important competing interests of corn farmers in Iowa and refiners in Pennsylvania.

“He’s taking a very personal involvement in it,” Republican Sen. Chuck Grassley of Iowa, the most influential congressional backer of the policy, told me in an interview last week. “When you have the president himself, you don’t need to worry about the chaotic conditions at the White House.”

Trump and his top advisers have been meeting in recent months with companies that refine oil and those that produce corn ethanol, as well as their allies in Congress to find elusive middle ground over the mandate’s compliance costs.

Gritty details:

Some refineries are facing high costs to comply because they don’t have the capacity to blend ethanol. So they have to buy credits called Renewable Identification Numbers (RINs) from others that do have blending capacity, including other oil companies.

These refineries, which include Northeast-based firms PBF Energy and bankrupt Philadelphia Energy Solutions, want the mandate relaxed so their costs go down.

One proposal by Republican Sen. Ted Cruz of Texas would cap the amount of RINs companies can trade.

Ethanol companies want the policy expanded to allow more blending, which they argue would lower compliance costs.

“The last six months have been about RINs and most people have no idea what that is and why we are talking about RINs,” said Emily Skor, CEO of Growth Energy, a coalition of ethanol companies.

Grassley tweeted to Trump late last week: “I want to shake what u might be planning abt a RINS cap for a short period. It will be CATASTROPHIC to ethanol.”

That prompted responses on Twitter like “How many of you even know what RIN is ? Without goggle ? [sic] LOL” and “What is RINS cap?”

This arcane fight is a classic battle for market share. Corn ethanol’s share of the fuel market is growing and testing some refiners’ ability to comply with the mandate. Nearly every gallon of gasoline now has 10% ethanol blended into it.

When Congress created the mandate in 2005 and expanded it in 2007, lawmakers predicted increasing gasoline demand and decreasing oil production. On both fronts, the opposite occurred: Oil production skyrocketed and demand for gasoline leveled off. Companies are fighting for their piece of a stagnant transportation fuel mix.

“It is now a battle about winners and losers,” PBF Energy CEO Tom Nimbley told me at an energy conference in Houston earlier this month. “It’s a fight over money and market share.”

Other oil companies, ranging from giants Shell and BP to independent refiners like Andeavor, are better situated to comply with the mandate. That's either because they've had a long-standing ability to blend ethanol with gasoline or because they changed their strategy over the last decade to do so.

“Some people do long-range planning better than others,” said Jack Gerard, president of the American Petroleum Institute, whose members represent all parts of the oil and refining sectors. “That’s what we call free-market competition.”

Nimbley said his company hasn’t been able to change its operations to blend ethanol due to infrastructure and geographical constraints.

“It’s an expedient argument to say ‘you just don’t have the right business model,’ ” Nimbley said. “That’s just not factual. That’s just the hyperbole that gets into this situation.”

While refineries and ethanol companies battle it out over the mandate’s compliance costs, the third goal Congress had in mind of combating climate change is lost in the noise. Lawmakers envisioned biofuels made from plant material that's cleaner than corn ethanol to develop. That hasn't happened.

For context:

The law had envisioned 5.5 billion gallons of biofuels made from cellulosic material like switchgrass to be produced last year.

Instead, just 13 million gallons of this liquid type of biofuels came online in 2017, according to Michael McAdams, head of the Advanced Biofuels Association. This is due to several unforeseen factors, including the 2008 economic recession and regulatory uncertainty during the Obama administration.

“We had high expectations,” said Henry Waxman, a former California Democratic congressman who helped pass the 2007 bill. “But we are very much disappointed by the way this law has worked out.”

What’s next: More tug-o-war. Grassley and other Republicans representing corn-producing states sent a letter to Trump Thursday requesting another meeting to talk about Cruz’s proposal to cap RINs. Lawmakers are also working on legislation. That remains a long-shot because ethanol policy divides the Republican Party controlling Congress.